“Self-driving sounds like it’s going to do something you don’t want it to do. Autopilot is a good thing to have in planes, and we should have it in cars.”

According to Elon Musk, what we have here is… failure to market effectively.

In a recent interview with Bloomberg News, the man whose divorce rated a story on Jalopnik offered his opinions on the future of self-driving cars. The most notable talking points? First, Musk likes the idea of camera-based systems more than he likes a Google-style LIDAR scanning system. In a world where camera lenses never get dirty, this should work perfectly. In the real world, one suspects that the owner of said car will have to intervene fairly often. Better not turn away from the road while you’re reading the tenth book in the “50 Shades” series, ladies.

But that’s okay, because Musk doesn’t like the idea of a “self-driving” car. Better to call it “autopilot”, as noted in the above quote. Here, he has a genuine point. The early self-driving cars will almost certainly be incapable of operating effectively in mixed conditions without frequent and occasionally immediate assistance from the tool behind the wheel. If you look at these systems as “autopilots” — that is, something you use like cruise control in limited situations while remaining at least partially aware of what’s happening — rather than “self-driving” — which implies you can take a nap on the way to work — it makes more sense.

The problem comes when autopilot-level cars have to co-exist with an ever more ridiculous set of rules on distracted driving. What will the owner of the “autopiloted” car be permitted to do? Will he be forced by law to look forward and simply watch the wheels go round and round, just in case something happens that the car can’t handle? Can you imagine being forced to watch a car drive itself from Indianapolis to St. Louis? We’ll need the Clockwork Orange eyelid-grabbers for that, methinks. Or maybe you should just stop thinking about it and participate in mass transit. The government would prefer that, and if there’s no mass transit where you live, that’s a clue that you should leave, right?

Tesla Motors, Inc. released its first quarter financial results yesterday, which featured a number of milestones for the auto maker. Among them, Tesla’s revenue rose 83% from the last quarter to $562 million, a record high for the company.

Tesla also posted the first ever profitable quarter in its history, with a net income of $11 million, or $0.10 on a per share basis. This large growth in revenue was largely aided by the fact that Tesla was able to recognize revenue on 4,900 out of the 5,000 Model S vehicles it managed to produce in the quarter. It is worth noting that $68 million, or 12% of Tesla’s revenue was earned through the sale of Zero Emission Vehicle (ZEV) credits to other automakers. Tesla notes in its letter to shareholders that they expect the sale of ZEV credits to decline in the future, and expect the amount to reach $0 by Q4 2013. Tesla’s move away from the sale these credits and towards growing the sale of their automobiles demonstrates their confidence in projected global demand of 30,000+ units annually. An improvement in their gross margin, which has moved up from 8% to 17%, is also an extremely important factor in their profitability.

One would expect that Tesla has settled down and is beginning to ramp up their production of the Model S while continuing to lower its costs through managing its supply chain and reaching economies of scale. After all, management reaffirmed its guidance of a gross margin of 25% for Q4 2013. In the Outlook section of the letter, Tesla explains that it expects increases in operating, research and development (R&D), and selling general and administrative expenses (SG&A).

Some of these costs may naturally rise in proportion to sales volumes. However, as Tesla fights an uphill battle to expand their gross margin, it cannot lose sight of controlling its fixed costs. Total Operating Expenses currently amount to 18% of sales. Any increase to this amount threatens to eat up any profitability that Tesla might achieve through an increase in gross margin. From a profitability standpoint, the ideal situation would be one in which Tesla could achieve its margin of 25% on its vehicles, while simultaneously taking advantage of its increase in production to achieve economies of scale and decrease operating expenses.

The most interesting line item on Tesla’s quarterly income statement is “Other Income.” Upon examining the statement solely on an operations level, one would notice that Tesla has posted a loss from operations of -$5.5 million. How could Tesla post a net income, yet be posting a deficit through its operations? One need only take a look at the line item “Other Income”, for a better picture. Other Income has a balance of $17 million, $11 million of which is from the elimination of a common stock warrant liability to the Department of Energy, and the remainder is from favorable foreign currency exchange impacts. Both of these items are irregular, specifically the liability elimination, in the fact that they will not likely happen year to year, and are not generated through the company’s regular operations. The liability elimination is also a non-cash item. To get a real sense of how Tesla performed, Other Income can be removed from the income statement (see Figure 1). The result is a net loss of $5.7 million for the quarter. It’s clear that there is still much work to be done before Tesla is truly profitable based on its operations. These types of irregular items cannot be relied upon to achieve profitability every quarter.

Figure 1(in millions)

Perhaps a more relevant dataset is Tesla’s non-GAAP figures. The non-GAAP figures, which are intend to be used by management for internal purposes, can sometimes more accurately reflect a company’s performance on the interim, without being hindered by stringent accounting regulations. Figure 2 displays Tesla’s reconciliation of Net Income from GAAP to non-GAAP.

Figure 2 (in millions)

The non-GAAP measure of Net Income is slightly higher than the GAAP reporting, at approximately $15 million. Non-GAAP starts with the GAAP reported income of $11 million. Notice how almost $11 million is subtracted from net income in “Change in fair value of warrant liability.” This represents the Department of Energy liability elimination mentioned earlier. What Tesla is doing here is effectively removing this amount from its GAAP net income, not unlike the similar calculation done above. Tesla has management has realized that this liability is a large contributor to its profits, and has removed it to create a figure more representative of its operational profitability.

The next item is stock-based compensation expense. This amount was originally included in “Total cost of revenues.” For those of you who are unfamiliar with this concept, an article by Ian Gow, an assistant professor of accounting information and management at Northwestern’s Kellog School of Management, explains it as stock options that are granted to employees. Gow explains that recently accounting standards have required companies to disclose stock-based compensation expenses, as Tesla has done by including it in cost of revenue. The article continues to elaborate that stock-based compensation expense is an area for managers to manipulate accounting data in order for them to reach their targets or benchmarks. The accounting for this type of expense becomes increasingly tricky when considering that it is a non-cash expense. While it is harder for management to toy around with this expense due to revisions to GAAP, Tesla has elected to add this expense back to their net income in its non-GAAP reporting. This is not an attempt to discredit the integrity of Tesla’s management, rather to illustrate the importance that non-GAAP figure must be taken with a grain of salt.

Regardless, Tesla has made huge strides in its earnings. Just last quarter (Q4 2012) Tesla posted a net loss of almost $90 million. Accountants and analysts can debate the significance of line items for eternity, the larger point being that of an upward trend for Tesla. In Q2 it will be interesting to see is Tesla can build on its profitability, or fall back into the red without the help of irregular account balances.

As enthusiastic as I am about the actual product (when everyone was ready to crap all over Tesla based on some bad information, TTAC was one of the few publications to go to bat for the upstart auto maker), Elon Musk’s series of announcements, frequently couched in hyperbolic descriptions of their significance, are beginning to grate on me. Every week, Musk seems to descend from Mount Sinai bearing yet another set of tablets that promise to “disrupt” (to use a favorite term of Silicon Valley) the automotive landscape forever, yet end up being little more than a not-quite-a-lease program or some announcement about after-sales care.

A look through TTAC’s archives shows that Tesla has in fact cribbed some of their ideas from Hyundai. While Musk has endlessly touted that his pseudo-lease program will guarantee the value of the Model S, Hyundai has been making that same promise since April of 2011.

Meanwhile, Tesla’s service program, which Musk touts as the “world’s best” seems to have a lot in common with the one created by Hyundai for the Equus. Both involve having your car picked up from the location of your choice and exchanged with a loaner vehicle, ensuring that you never have to step foot in a smelly service department ever again.

Perhaps we’ll soon find out that Tesla overstated their mileage claims for the Model S, which would then allow us to really draw some parallels between the two companies. Oh, wait a minute…

We don’t get enough good questions from the readers, and it’s a damn shame. Reader Steve Hofer sent us a great one via email; what if Elon Musk was running General Motors?

I was thinking about how Steve Jobs came from what was essentially a failed company with NeXT, to raise Apple from the dead. I imagined the possibility that GM would take over Tesla. Thinking of the Apple precedent, I imagined what if Elon Musk pulled a Steve Jobs and leveraged a board seat into effective control of the company. Assuming Elon became GM’s CEO, does he have what it takes to do a good job? Perhaps he does. I have some reasons.

(1) Elon is smarter than anyone at GM.

(2) He understands how to put together a critical path to implement very complex tasks, whether building an electric car or a private space program.

(3) He is not risk adverse.

(4) He is not tied to 19th or 20th century ideas.

(5) More traditional choices failed and will likely fail again.

Personally, I am not willing to take the Thomas Friedman-esque leap of logic that posits that a successful tech entrpeneur should be put in charge of America’s auto industry. Tesla and GM are as different as two car companies could possibly be, and who is to say that there isn’t somebody at GM that has an equally formidable intellect as Musk does. We don’t know for sure one way or another. In any case, there are plenty of commenters who have actually spent time working with (or for) GM who have a much better insight than I do. Have at it.

Yesterday’s Tesla “lease offer”, (which turned out to be Elon Musk’s “big announcement”) was a classic display of Tesla’s penchant for theatrics. On the surface, the move is a smart one; most customers in the large luxury sedan segment tend to lease their cars, so Tesla’s move is nothing out of the ordinary.

The 5 year lease program will allow customers to keep making payments on the car as a means of buying it outright, rather than the traditional balloon payment used by most auto makers. And, as Wired’s Damon Lavrinc notes, you could technically lease the car with nothing down.

Depending on where you live, the initial payment could be as low as … nothing. Tesla’s financial partners in the program, Wells Fargo and U.S. Bank, take the $7,500 federal tax credit offered to anyone who buys an electric vehicle, roll that into the state rebates and include it all as your down payment. In California, for example, that comes to $10,000.

Where it gets interesting is some of the numerical gymnastics that, according to Tesla’s True Cost To Own lease calculator, can leave you with a net lease cost of -$2,000. To find out how that happens, check out EV expert John Voelcker’s excellent take-down of Tesla’s leasing program. Rather than summarize and butcher it at TTAC, you might as well head straight to the source. It’s not to be missed. Especially if your time is worth $100/hour, as Musk thinks.

Tesla announced plans to pay down their $465 million dollar Department of Energy loan in 5 years or less, as Tesla seeks to achieve profitability.

Automotive News reported on comments made by Tesla CEO Elon Musk while attending a conference in the Washington, D.C. area

That loan currently must be repaid within 10 years, Musk said. Tesla will “codify” a commitment with DOE to reimburse the government within five years or less, Musk added, after declaring that the loan guarantee should be “viewed as a success.”

In addition to Tesla, Ford, Nissan and Fisker all received loans under the $25-billion dollar program Advanced Vehicle Technology Manufacturing program, which was introduced by President George W. Bush.

Ford and Nissan’s loans are worth $5.9 billion and $1.4 billion respectively, and Energy Secretary Steven Chu said that he expects to be paid back in full by the auto makers, despite other loans that “…may be at risk”. According to Tesla’s 10-Q filing for Q4 2012, the company made its first loan payment of $12.7 million on schedule, with the next payment due in March.

The New York Times had their public editor (think ombudsman) publish a response to the whole “Dead Tesla’ fiasco (summary by our own Dan Wallach here), and it is far from kind to reporter John Broder.

While Public Editor Margaret Sullivan defends Broder against Tesla founder Elon Musk’s claims that he “faked” his test drive, she does just about everything else possible to impugn his journalistic cred. Witness Sullivan’s epic qualification when sticking up for her writer

My own findings are not dissimilar to the reader I quote above, although I do not believe Mr. Broder hoped the drive would end badly. I am convinced that he took on the test drive in good faith, and told the story as he experienced it.

Did he use good judgment along the way? Not especially. In particular, decisions he made at a crucial juncture – when he recharged the Model S in Norwich, Conn., a stop forced by the unexpected loss of charge overnight – were certainly instrumental in this saga’s high-drama ending.

Sullivan claims she consulted with

“…Mr. Broder, Mr. Musk, two key Tesla employees, other Times journalists, the tow-truck driver and his dispatcher, and a Tesla owner in California, among others…I’ve also had a number of talks with my brother, a physician, car aficionado and Tesla fan, who has helped me balance what might have been a tendency to unconsciously side with a seasoned and respected journalist – my own “confirmation bias.”

Perhaps Ms. Sullivan’s brother could have been replaced by someone with an engineering or automotive background rather than a Tesla fan and car nut, who surely comes with his own set of biases and, in the case of the average car aficionado, opinions that are largely formed based on hearsay and a quick scan of a buff book while waiting in the CVS checkout line.

Also missing is one crucial element that most of you are aware of, but Sullivan seems ignorant of; the element of pressure from an OEM when testing a car or anything related to the car on a manufacturer-arranged drive. Tesla has operated some of the most tightly controlled testing protocols we’ve seen in some time (TTAC has yet to drive the car outside of a brief preview). If anything, invoking the Holy Cause of journalistic integrity would call for Sullivan and the NYT to push back against any interference or petulant PR campaign from Tesla and Elon Musk. In the wake of Jayson Blair and Judith Miller, the Grey Lady is doubtlessly sensitive to claims of journalistic incompetence – or worse. But if Sullivan had consulted someone besides a few Tesla employees and her brother, this crucial element may have been brought to the surface, and a different tone may have been adopted.

Note the date of publication is 1914, not 2013

While following the he said he said back and forth between the New York Time’s James Broder and Tesla’s Elon Musk, over Broder’s unsuccessful drive from New York to Boston in a Tesla Model S, it seemed to me that one important factor affecting consumer acceptance of EVs is being obscured by all the Sturm und Drang of the NYT and Musk both working this story for maximum bad publicity for their respectless enterprises. That factor, ironically, is why Tesla set up the media road trips in the first place, the fact that EVs will need a publicly accessible charging infrastructure if they are going to be seen as anything other than town cars. The Model S press trips from DC to Beantown were supposed to demonstrate Tesla’s expanding network of locations equipped with Tesla’s “Supercharger” quick charging stations.

That need for public charging stations has been obscured by other issues in the discussion of electric cars, which it seems to me have been focused more on range than anything else. Tesla is not unwise to create it’s own charging infrastructure for its customers because the simple fact is that if you could recharge an EV as quickly and as conveniently as you can refuel a gasoline or diesel powered vehicle, and if you could find a charging station within your EV’s range, range becomes more of a non issue. Let’s face it, how many owners of gasoline cars really consider range on a single tank of gas when buying a new car? As long as you can get ~300 miles between fill ups, the vast majority of car consumers don’t really care about range. Gas mileage yes, but I’d bet that total range is only important to a minority of gas/diesel drivers.

This is nothing new. Like 3D photography and movies, this is not the first go-round with EVs. Electric cars and were marketed more than a century ago, at the dawn of the automotive age and soon enough electric car companies, electric component makers, trade organizations, tire and battery companies, and publishers rushed in to help EV owners find a charge.

The EV side of the auto industry understood that drivers of EVs would need public charging facilities at the same time that it promoted electric cars as suitable for touring. The Electric Vehicle Association of America even published a charging station guide to the Lincoln Highway, America’s first attempt at a coast to coast road. Since the longest distance between charging stations was about 120 miles, well beyond the range of any contemporary electric car, it’s doubtful than any early electric automobilists completed the entire route, but the EV industry did what it could to dispel the image that electric cars could not be taken on long trips. Tesla is doing the same today.

The fact that the Electric Vehicle Association agreed on a standard charging plug that was used by most EV makers made things a little easier. In the photo above, the charging port on a 1922 Milburn Light Electric is being held open so you can see the terminals in the photo above. The photo below shows a similar charging port, though closed, on a 1914 Detroit Electric runabout.

By 1912, the Detroit Electric Car company, the most successful of the first wave of EV makers (it has only been in the past year that the Nissan Leaf surpassed the Detroit Electric as the most successful EV ever, in terms of total sales) had both standalone charging garages as well as combined sales branches and charging stations in Detroit, Manhattan, Chicago , Boston, Brooklyn, Buffalo, Cleveland, Evanston, Kansas City, and Minneapolis.

In 1914, the New York Electric Vehicle Association, in conjunction with Automobile Blue Books started publishing route guides for “electric touring”, that mapped the locations of charging stations and provided suggested touring routes.

The guide was updated, apparently annually. In an emergency, drivers of electric cars could get a charge from electric streetcar or trolley wiring – as this Tom Swift story relates.

While General Electric sold  mercury arc rectifier based residential chargers to EV owners, the majority of the more than 14,000 chargers that GE sold a century ago were sold to public facilities like hotels and parking garages.

The Exide battery company, perhaps the major EV battery maker in the early days of the automobile, set up its own storage and charging garage (many city dwellers didn’t have residential parking for their cars) and “battery depot” in New York City.

In addition to public charging facilities, taxicab companies that operated electric cabs set up their own charging garages and had chargers installed for their drivers’ use at hotels they serviced.

As was shown 100 years ago, broadscale consumer acceptance of electric cars needs a publicly accessible charging infrastructure. It’s unfortunate that the war of words between Mr. Musk and the New York Times is obscuring rather than illustrating that need.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

Tesla has officially launched their long-awaited “Supercharging” network last night to a star-studded crowd in Southern California. (We assume it was star-studded since our invitation got lost in the mail.) The EV network promises to enable Model S and Model X owners to charge 150 miles of range in 30 minutes. What about your Roadster? Sorry, you aren’t invited to this charging party. Have a Tesla and a LEAF? You’ll have to be satisfied with separate but equal charging facilities as the Tesla proprietary charging connector restricts access to Tesla shoppers only. Is this class warfare or do we parallel the computer industry where connectors come and go with the seasons?

What’s the big deal with charging? Let’s go over the Model S’s charging time chart and you’ll understand. From a regular 120V wall outlet the Model S will gain 4-5 miles per hour of charging and consumes about the same amount of power as a space heater. Charging at 41 amps, the car gains 31 miles per hour and consumes as much power as TWO average electric clothes dryers. Charging at 81 amps (a service that many homes with older wiring or smaller services cannot support) the Model S gains 62 miles an hour and consumes more power than an average home’s A/C, dryer, washer, stove, oven, lights and small appliances put together. With a range of 300 miles and a 10 hour charge time at the 41A rate, it’s easy to see why fast charging stations are appealing. Tesla’s Supercharger’s specs are yet to be revealed, but by the numbers it is apparent the system is delivering a massive 90kWh charge which is likely 440V DC at around 200A. An hour of charging at that rate is 70% of the power that my home uses in an entire month.

Is this a Tesla issue? No, it’s an EV issue. If you expect your EV to drive like a regular car, modern EVs are a delight. If you expect your EV to refuel like a regular car, we’ve hit a snag. But it’s more complex than that, you see, only three of the four Model S trims support DC fast charging and the only other EVs on the market with a DC charge port are the Nissan Leaf and Mitsubishi i-MiEV. Except they don’t use the same connector or the same standard. Oops. Adding more complications to the mix are the EVs with no DC charge connector like the RAV4 EV, Volt, Prius Plug-In, Accord Plug-In, Focus, Active E and Coda while the new Chevy Spark is rumored to début a third standard: the SAE combo plug.

Of course, if you think of your car like you think of your cell phone, this makes sense as the phone you bought last year wont use the same charger as the phone you buy today. If you think of this in car terms however it’s like buying a new car and finding out that most of the gas stations have a nozzle that won’t fit your car.

Back to those Tesla charging stations. Tesla opened the first four in Southern California and announced two more stations will go online in October with stations in Las Vegas, Northern California and Oregon by summer 2013 with the 100 station network being complete by 2015. If that network sounds familiar then it should, because the recent settlement in the California vs NRG lawsuit means there will be 200 new CHAdeMO stations in California over the same time frame in addition to the 8 already installed and the 75 commercial stations planned or under construction. It isn’t just California on the CHAdeMO bandwagon however, the Department of Energy claims there are over 113 CHAdeMO stations in the USA and a 1,200+ unit installed base in Japan.

What does this mean to Tesla owners? Until Tesla creates a CHAdeMO to Tesla charging adapter cable (much like they have a J1772 to Tesla cable for use at public AC charging stations), Tesla owners will be restricted to regular AC charging or the smaller Tesla only charging network. On the flip side, Tesla is promising the Tesla charging stations will be free to Tesla owners, positioned next to trendy restaurants and you won’t have to mix with the Leaf owning rabble. You can also feel superior because Tesla’s newer standard charges 80% faster than the 50kWh CHAdeMO connector.

What does this mean to LEAF and i-MiEV owners? It means this is just the beginning of a standards battle. If you bought an EV before this raft of new J1772-connector-toting models, you know what I’m talking about. While CHAdeMO has the lead now, depending on what standard the rest of the industry supports this could change rapidly.

What about the rest of us? If we continue to build more battery electric vehicles and continue to develop batteries that are more and more power dense, you can expect even the snazzy Tesla charging connector to be outdated on a few years. If you expect an EV SUV to deliver 300 miles of electric range, AWD, decent performance, mild off-road ability and Range Rover quality luxury trappings, then expect it to have a battery that is 50-100% larger than the Model S’ massive 85kWh pack. This means you have to either take all the charging rates and nearly double them, or you have to develop a charging method that charges 50-100% faster to keep the same performance.

Of course, just like LEAF owners experience battery degradation caused by repeated use of DC quick charge stations, Tesla owners should be mindful that batteries don’t last forever and the faster you charge them the shorter their life will be.

What good is a twenty-minute test drive?

Well, when most sources are getting a ten minute test drive, a twenty-minute one is twice as good. The problem, of course, is that range is as critical to an electric car as tensile strength is to parachutes; it’s the difference between a safe arrival and a harrowing trip. Without a genuine understanding of the Tesla’s range, we can’t say for sure whether it’s a great car or not.

That doesn’t mean we can’t pass along what we did learn during those twenty minutes.

We can start with the physical envelope of the car, which is similar to that of a Jaguar XF. The looks are Jaguaresque as well. Franz von Holzhausen, the man responsible for styling the big Tesla, also penned the Solstice/Sky twins for General Motors. Like those ill-fated droptops, the Model S has a packaging issue; in this case, it’s rear headroom, which is sacrificed to the false god of faux-coupe styling. It’s a shame, because rear legroom is solid and with no central tunnel it might be possible for a third person to be reasonably comfortable in the middle seat. Tesla reps tell us that the panoramic roof, available as an option, actually adds an inch of headroom, but our car came without it, or the rear jump seats and their Fifty Shades of Grey-esque five point harnesses.

The Tesla Roadster was universally panned for interior quality. In the case of the Roadster, which was based on the pre-Bahar Lotus Elise, the apple doesn’t fall far from the tree. The Model S, by contrast, is a significant leap forward. The interior design is unique and distinctive without straying too far from the interior template set by the E65 BMW and its imitative successors. The only parts-bin contribution we recognized was the Mercedes-Benz column shifter. Although there was a loose trim piece on a door, this was an early series production car and overall the interior meets the expectations of this market.

Since Tesla expects to reach out to the tech-savvy crowd, they’ve gone through the trouble of providing what looks like an iPad class-leading center display. It’s Internet-enabled and it’s big enough to read your favorite website site — or, if that doesn’t load, you can check out TTAC, as seen below. If you aren’t interested in looking at photographs of rope bondage, and want to do unmentionable things like change the temperature or radio station, it’s all done through the giant touch screen, and it works fairly well. How it will hold up in a decade’s time is perhaps the second most interesting variable.

Naturally, we don’t recommend that you surf and drive, particularly when operating a vehicle with this kind of power. Although the Model S won’t keep up with the warp drive Tesla Roadster Sport, it’s fast enough. The kind of “electric-motor thrust” often found in reviews of turbocharged German luxury sedans is provided here by an actual electric motor. Our test variant was the most powerful one; however, due to some misdeeds by other participants in this event we were hard-limited to 80 miles per hour. The Model S reaches that in a hurry, no sweat. As you’d expect from an electric vehicle, the power delivery is linear and muscular. There’s no sportbike-esque exhilaration like you’d find in the Roadster, but it’s plenty quick, launching forward with the same urgency of a Porsche Panamera. The Porker relies on all-wheel drive and the big  V8 to launch away from a light; in the Model S, that sensation of an aircraft carrier catapult launch is magnified. The power is always available right now in a way that no gasoline car can match. The flat-and-straight nature of our Missisauga, Ontario test venue prohibited us from verifying claims of totally flat, telepathic cornering and whatever superlatives have been heaped on this car. Unlike the Roadster, the Model S won’t be expected to corner like a go-kart or any of the things people typically have in mind when they say something corners like a go-kart.

The Model S is spacious, and quick, and stylish, and it’s frankly a wonder that it got built at all in an era when the engineering, design, assembly, and distribution of a motor vehicle happens at a scale that would impress the architects of the Manhattan Project. Until the range question is answered, however, it’s impossible to know whether this Manhattan Project produced a vehicle that is the bomb… or just a bomb, period.

Summer is always a slow time in the industry, so what better way to boost traffic than to manufacture a controversy out of thin air about a “third rail” topic like electric cars?

The past week or two has seen Jalopnik take reviewers and Tesla to task over the short drive times offered during the Tesla Model S launch. One of the biggest criticisms leveled at Tesla was that drive times only worked out to around 10 minutes, which, Jalopnik rightly claimed, is not enough time to properly form a driving impression.

What they left out was that press drives, on the whole, aren’t a great place to form real impressions of a car, full stop – but Jalopnik and other outlets do it anyways. This is the precise reason why we offer Take Twos (and sometimes, additional reviews beyond that). I was on the same Hyundai launch as Jalopnik’s Jason Torchinsky, where we reviewed the Elantra GT, Veloster Turbo and Elantra Coupe. Drive times were relatively short (a couple hours, perhaps) on roads that were carefully selected to show off the car’s strong points and minimize its weaknesses. The Coupe was driven only on lazy, mostly straight highways, while the Veloster Turbo and Elantra GT were flogged on the kinds of roads that driving enthusiasts can only dream about. That did’t stop Jalopnik from giving them a “Jalopnik number”, some kind of definitive, transcendent quantification of a vehicle that will forever be enshrined in the annals of automotive history.

Our writers are spread out across the globe (literally), and the diversity of opinions is enhanced by the lack of proximity. A launch in California or Andalusia may be a great place to test out a new droptop sports car; but how will it hold up on the bombed out roads of Detroit, where Michael Karesh lives? Will a hybrid car really provide the kind of fuel efficiency it claims? Let Alex Dykes take it out for a day of stop and go driving in San Francisco. And of course, we have our very own driving ace who needs no introduction.

When I heard about the Model S launch, I sent an inquiry to Tesla Toronto. They gave me the Roadster for a day back in 2010, with the only stipulation being “bring it back before the battery is drained”. Jack did a review of the Roadster for Left Lane News with no restrictions on time or distance. Tesla Toronto’s own Model S demo wouldn’t even be available until August, which is when multi-day tests of the car should be available. So while we weren’t invited to the ultra-exclusive first drive party, we’ll probably get a proper, unrestricted review of the car.

Jalopnik has taken to calling out Dan Neil of the Wall Street Journal, for his positive review of the Model S. Neil is an easy target; not only is he popular, a Pultizer Prize winner and a household name (if there is such a thing in this business) but he also comes across as a pompous, self-abosrbed narcissist, which makes it easy to feel schadenfreude when bad things happen to him. Thankfully, Neil is smart enough to know that he’s having his credibility attacked by an outlet that will literally report on anything in the blind pursuit of traffic numbers. Neil did a masterful job of eviscerating the weak criticism against him, and the responses by the folks at Jalopnik are utterly submissive – leaving no doubt that if the WSJ came calling for any of them, they would all be happy to jump ship and enjoy the kind of lifestyle, adoration and TV deals that come from writing for such an institution and the receipt of a Pulitzer Prize. Like an invite to drive the Tesla Model S.

Couched in all the righteous indignation about journalistic integrity and mis-use of taxpayer dollars is the simple fact that things are slow in the summer, and a fabricated controversy is good for business. It’s even better when it involves topics and people that are polarizing, to the point where one can project their existential angst and childhood issues on to them. So why not try to boost the numbers than by going after a couple of popular, controversial figures, replete with jokes about a supposedly secret same-sex relationship, blowjobs and other mature, dignified prose that we’ve come to expect from the Gawker network (or at least, the during the Ray Wert era). This whole campaign isn’t just a big boost for traffic; it’s the Powerball jackpot. Electric cars, Elon Musk, Dan Neil, self-aggrandizing, vulgar snark. The only thing better would be if a celebrity died and something happened involving cars and female genetalia. Oh wait…

Maybe this is just about personal pride. Press drive invites are often times just a proxy for professional validation. Journalists love to compare notes on what events they got invited to, like adolescents comparing who is wearing the “right” clothing or hairstyle. It’s a frequent topic of complaining here at TTAC, when someone unqualified is invited to an event that is sure to yield a great story, and we’re left out in the cold. Car makers really do use access as a carrot and a stick in exchange for toeing the line. And when you’re more interested in the people and the events rather than the car (like we tend to be), it makes it difficult to do our jobs. Or maybe this is just another “sponsored conversation” guerilla marketing effort that’s part of Gawker’s new revenue model? I don’t know. But I am counting down the days until August.

An article in the New York Times Dealbook blog claims that Tesla is using their customer deposits on upcoming models as a major source of cash to finance operations.

The article states that

“Tesla is increasingly using customer down payments to finance operations. Without the deposits, the company’s operations would have consumed $175 million of cash last year instead of $114 million…

But that money could dry up if the company experiences production delays or other bumps in the road. Then Tesla would be more reliant on a clean-energy loan from the government.”

Those loans, as we know from Fisker’s trials and tribulations, are rather fickle and are not a reliable source of incoming for a struggling “green” automaker. While customers generally put down about $5,000 to reserve a Model S, deposits for customized cars can run much higher (one interviewee in the article put down $40,000) – and customers may be unable to get back their money if Tesla tanks.

Tesla apparently does not put their customer deposits aside, and uses the money to finance their operations. If the company goes bust, customers will have to wait until other major creditors, like the federal government, get paid. Customers have yet to sign formal purchase agreements, though that will apparently be happening soon.

Washington state is so far the only location where Tesla uses segregated accounts to hold customers money. California, by far Tesla’s biggest market, does not require this. Tesla has collected about $61 million in deposits in 2011, up from $5 million in 2010. While Tesla’s enthusiastic customer base has no problem forking over cold, hard cash (significant sums, at that) to reserve one of the so-far unreleased models, the idea of it being largely unaccountable once received by Tesla seems a little disconcerting, especially in light of the volatile nature of the “green technology” business and Tesla’s track record for releasing new product.

From the first part of this clip from Bob Lutz and Elon Musk’s recent appearance on the Charlie Rose, in which the two discuss “The CO2 Thing,” you might guess that the two are at odds with each other. After all, Bob’s the gruff, “Global Warming is Bullshit” type and Elon is the sensitive, change-the-world type. But by the end of this brief clip, the two industry mavericks are falling all over themselves with mutual admiration. But then, both have learned from the other (however indirectly) over the past few years: Lutz’s legacy of the Volt was in part motivated by Musk’s endeavor, and Musk himself has a lot more respect for Detroit’s “old school” manufacturing know-how now that his firm is actually trying to build its own cars in volume. It’s a study in contrasts watching these two iconoclasts from such separate worlds going at it… and yet you get the distinct impression that these two guys aren’t quite as different as you might think.

Watch the complete Musk-Lutz interview here.

Watch Lutz’s one-on-one interview here.

Yes, the Model S can fit eight… just not legally. Meanwhile, those are some pretty small kids in the old-school, rear-facing jumpseats (they’re only approved for passengers under five feet tall). But hey, it’s Elon Musk’s party, and he’s free to say whatever he likes until the car is actually on sale.

Speaking of which, it seems that the multiple versions of the Model S will not only be differentiated by range (with 160,230 or 300 miles of range) but Autocar reports there will be a performance version of the 300-mile car as well, which will hit 60 MPH in 4.6 seconds instead of the standard 5.5 seconds. The 160-mile version is reported to cost around $50k, the 230-mile version about $60k, the standard 300-mile version around $70k and the performance version will hit $80k. For a taste of the Model S’s performance, hit the jump for a brief, chauffeured test ride video.

We don’t yet have understanding and expertise when it comes to mass production or even limited mass production. There is so much to learn, I don’t know quite where to start.

When the mess gets sorted out, I’d like to have a conversation with whoever’s in charge at the time — the car czar or whoever — and say “I’d like to run your plants, if you don’t mind”

We’re really trying to put together a world-class manufacturing team. We’re trying to create a Spartan army of expertise.

Tesla CEO Elon Musk give Automotive News [sub] his most inspirational metaphor for Tesla’s effort to ready production of its $50k Model S sedan. And though Musk is quick to call outsourced production “wishful thinking,” the vehicle’s transmission and battery cells as well as “wiring harnesses, skeletal mechanisms for the seats, and glass for the windows” will be supplied by outside firms. Musk says that sourcing for 80 percent of the Model S’s components has been narrowed down to one or two companies, and a plant location in Southern California will be announced shortly. But, he notes, the factory deal isn’t done yet. Or, as Musk puts it:

It hasn’t yet been finalized. We’ve almost fully negotiated the deal, but it has not been signed yet